Pa. Auditor General finds state’s fracking oversight a fiasco Probe finds lack of inspections, enforcement, transparency

Pennsylvania’s regulation of the shale gas boom has been underfunded, inconsistent and ineffective, according to an investigation by the state’s auditor general released today.

Auditor General Eugene DePasquale likened the Pennsylvania Department of Environmental Protection’s efforts to oversee the industry to “firefighters trying to put out a five-alarm fire with a 20-foot garden hose.” He added: “There is no question that DEP needs help and soon to protect clean water.”

The audit, covering a period of 2009 through 2012, was launched by DePasquale immediately after he was sworn in as auditor general in January 2013. It came in the wake of a controversy over whether state investigators obscure or alter the outcome of investigations into drilling’s impact on water supplies by disclosing an incomplete suite of chemical tests. The intention of the probe, according to a letter from DePasquale at the time, is to determine the "adequacy and effectiveness of DEP's monitoring of water quality as potentially impacted by shale gas development activities, including but not limited to systems and procedures for testing, screening, reporting and response to adverse impact such as contamination."

The report was blunt in its findings: the problems related to shale gas development are much deeper and broader than the DEP can presently handle, and they often go unaddressed or left up to industry without adequate follow-up by the agency. The problem is rooted to a wholesale lack of inspections, enforcement and transparency.

Often, according to the report, the agency does nothing about confirmed cases of water pollution tied to drilling problems.  After reviewing a selection of 15 files of water degradation tied to nearby shale gas operations, auditors found the agency issued only one order for the driller to restore or replace the water supply. Instead, the DEP relied on voluntary action by companies to resolve complaints and violations.

“When DEP does not take a formal, documented action against a well operator who has contaminated a water supply, the agency loses credibility as a regulator and is not fully accountable to the public,” DePasquale said. “When DEP has enforcement authority under the law it must exercise that authority routinely, consistently, and transparently. Those gas well operators whose actions cause harm to water supplies should not get an enforcement ‘pass’ just because they have convinced DEP that they will come into compliance with the law or that they negotiated a settlement with the property owner.”

Among other findings:

• The DEP does not post required inspection information on its website. Auditors found errors of more than 25 percent in key data fields, and 76 percent of inspectors’ comments were omitted from the online inspection reporting.  “It is unfathomable to us that for a basic responsibility of DEP -- inspecting oil and gas facilities – little criteria exists for when those inspections should occur,” DePasquale said. “Until DEP updates its out-of-date inspection policies, to include mandated inspections at specific critical drilling stages and during the life of the well, it will be nearly impossible to measure DEP’s performance in conducting this very basic responsibility to protect the environment.”

• The DEP does not use an official and independent system to track shale gas well waste from the well site to disposal.  Instead, the agency relies upon a “disjointed process that includes self-reporting by well operators with no assurances that waste is disposed of properly.”

• With respect to transparency, auditors discovered that accessing DEP data is “a myriad of confusing web links and jargon” that was often incomplete. “We could not determine whether all complaints received by DEP actually were entered into the system. What’s more … it is difficult to figure out exactly how many complaints were received, investigated, and resolved by DEP,” DePasquale said.

Although reports critical of the gas industry and regulators are nothing new, the inspector general’s report is noteworthy because it comes from within an independent arm of state government.

The DEP disagreed with all of eight findings of the audit critical of the agency, but agreed with a majority of the 29 recommendations for improvement.

Auditors encouraged DEP to:

• Issue orders to a well operators who pollute water supplies —even if DEP used the cooperative approach in bringing the operator into compliance or if the operator and the complainant have reached a private agreement;

•· Develop better controls for how complaints are received, tracked, investigated, and resolved;

• Hire additional inspectors to meet the demands placed upon the agency;

• Create and follow policy requirements for timely and frequent inspections;

• Create a functional system to track shale gas waste and be more aggressive in ensuring that the waste data it collects is verified and reliable;

·• Reconfigure the agency website and provide complete and pertinent information in a clear and easily understandable manner.

Global fracking debate: Coming soon to town hall near you Upstate NY localities face fallout from Home Rule decision

Late last month, New York’s high court issued a ruling that put the debate over the merits and risks of shale gas development in the hands of local governments.  The much-anticipated ruling – a monumental victory for grassroots political action -- settled a long-standing question regarding the state’s jurisdictional control over the matter. Yet it raised many other questions about how local governments will respond.

There are towns for drilling and towns against drilling. But much of the fight over where and to what extent shale gas development – including high volume hydraulic fracturing -- will be a part of the New York landscape will play out in towns with no stated policy. Do communities that don’t want fracking need to actively pass a ban? Can communities that want fracking amend zoning laws to encourage it? What happens if they do neither?

These questions are predicated on a pending decision by Governor Andrew Cuomo on whether to allow fracking anywhere in the state. While the outcome of that remains anybody’s guess, we know from Cuomo’s past remarks that he favors a plan to begin issuing shale gas permits in towns with no local bans. These happen to be along the border with Pennsylvania, which also sit over the most viable parts of the Marcellus Shale. This dynamic becomes especially relevant to towns in this area – and there are many of them -- with no comprehensive plan and nothing on the books specific to fracking.

One of these places is Vestal, where dozens of residents against fracking attended a town board meeting this week to urge elected officials to pass a local ban.

The reaction by Town Supervisor John Schaffer, as reported by BinghamtonHomepage.com, was not especially concrete. "Our town code says you can't do it here to begin with, and I've told these people [anti-fracking activists] that over and over and over," Schaffer said. He then added: "We’re aware of the recent Court of Appeals decision regarding home rule. While the decision permits the town to enact legislation that would ban fracking, it does not require us to ban it. According to the town board, we will carefully monitor this issue and will act when and if there’s an incident for us to do so."

(In her blog The Marcellus Effect, Sue Heavenrich covers a similar controversty unfolding in Candor, NY.)

Some legal experts say that towns could – depending on wording and interpretation of local law -- grant variances to gas companies to site wells in areas otherwise zoned against industrial use, which is just what supporters of gas development are hoping for and what opponents dread. Attorney Helen Slottje represented Dryden and Middlefield in their Home Rule victory. In a recent appearance on Capitol Press Room, Slottje pointed out that while the Court of Appeals ruling would make it more difficult for operators to drill in zoned areas, it would still be possible, depending on how a given town reacted to the ruling.

“There are in most zoning codes various exceptions for different uses that could be construed by a court to be like gas drilling sufficient to allow gas drilling to proceed,” she said. “The safest thing for a town to do is to pass a zoning amendment or stand alone law that makes it clear that gas drilling is not permitted in their town.”

Industry lawyer Tom West also raised that possibility. He told host Susan Arbetter his clients would be “implementing a strategy to protect our investments,” but because the nature of the fight had been so tactical – like a chess game where each side was anticipating the other’s moves -- he was “not at liberty to discuss that strategy.”

All this sounds suggestive and inconclusive because it is, at least until the matter is fully deliberated and acted upon at a town board level.

Some activists are already beginning to push the matter. Sue Rapp, a member of Vestal Residents for Safe Energy (VeRSE), characterized Vestal Supervisor Schaffer’s comment that the town would take a wait-and-see approach as “garbled messages not on point ... When examined, his remarks convey nothing of substance on the issue of zoning regs/variances and gas drilling.”

The ambiguity can be maddening or inviting, depending on your stake in the debate, and it has provoked some thoughtful comments from readers on my recent post about fallout from the Court of Appeals decision.

In response to a comment by Mary Sweeney, who pondered whether existing zoning laws would preclude drilling with no stated bans, fracking critic and policy analyst Stan Scobie elaborated on the undisclosed plan that West mentioned on Arbetter’s show. According to Scobie, West is organizing a campaign with certain towns over Marcellus shale zones to create policy – zoning overlays – that would maximize development of the play by creating the legal architecture to override zoning laws. Scobie writes:

Governor Cuomo and the DEC some time ago raised a difficult issue, namely,  fracking would perhaps be OK in those towns who "wish" to be fracked,  but  how would we know which ones they are? To address this the pro-drillers have crafted a "zoning overlay" strategy.

This plan would have each town modify their Comprehensive Plan, if they have one, to be somewhat fracking friendly, and then develop and legislate zoning overlays. These would, if passed, clearly identify the towns and areas in towns where fracking was OK. There would be no "frack me" resolutions passed quietly and quickly at Town Board meetings with zero attendance as seemed to be the case a couple of years ago. 

Scobie’s full response can be viewed here in the comments section.

This week, I asked West in an email whether zoning laws already on the books – those that prohibit industrial operations in residential or other areas -- effectively serve as “bans” to oil and gas. And of if so, can drilling supporters work around them? West responded:

Whether oil and gas activities are considered an industrial use, will be a municipality by municipality determination...  Much of the clarification will come over time.

In other words, much of where drilling is allowed will come down to interpretation of local zoning laws, and that interpretation will be made on a town by town basis by local leaders and their lawyers.

In short, the fight over drilling in New York is far from over. It continues on the state level, where activists like Walter Hang are leading a campaign to pressure Cuomo to withdraw the controversial policy review that is essential for it to go forward. And, pending that outcome, it continues on a local level, where towns will have to either craft policy clarifying how and if their zoning laws apply to gas drilling, or face the prospect of court challenges and the consequences when push comes to shove with money, leases, and passions on the line.